Calls for review of Katrina relief growing louder

WASHINGTON — There is so much money at stake that even the watchdogs have joined the dogfight over how best to spend the gusher of federal largess dedicated to Hurricane Katrina rebuilding.

Republicans and Democrats have rushed forward no fewer than seven distinct proposals in recent weeks that claim to be the best way to scrutinize the $63 billion set aside for recovery efforts, a sum that is expected to grow in coming days.

But in typical Washington fashion, some of the proposals actually will weaken oversight, watchdog groups say, while the competition among them might delay monitoring of the spending, now approaching $300 million a day.

"We have so much money going to so many different agencies that I think there is great opportunity for misuse of funds and mismanagement and even, unfortunately, fraud," said Rep. Jim Kolbe, R-Ariz., who has proposed creating a special inspector general for Katrina spending. "We need to move as quickly as possible."

The sudden interest by a Congress not known for its commitment to oversight is a reflection of the ballooning cost of hurricane relief, lessons learned from Iraq and growing unease in Republican circles about recent political scandals, politicians and analysts said.

The proposals for stepped-up scrutiny — ranging from a spending czar to expanding the role of the inspector general now overseeing Iraq's reconstruction — come at a time when high-ranking Republicans have been buffeted by corruption accusations.

Rep. Tom DeLay, R-Texas, was indicted this month by a Texas grand jury on charges that he conspired to violate campaign-finance laws, forcing him to step down as House majority leader. The Pentagon's inspector general, Joseph Schmitz, resigned last month amid accusations that he quashed investigations of powerful Bush political appointees. And the Bush administration's top contracting official, David Safavian, was arrested on charges that he lied to investigators about a golfing trip with top GOP lobbyist Jack Abramoff.

At the same time, the bill for Katrina is expected to grow by billions in coming weeks, according to several Capitol Hill sources. "There is sticker shock," said John Hart, a spokesman for Sen. Tom Coburn, R-Okla., who has proposed creating a chief financial officer responsible for all relief spending. "It comes after Iraq. We have a time of war, rising deficits, Medicare and Social Security [shortfalls]."

Watchdog groups said there is no question of the need for additional oversight for Katrina, which represents one of the largest government rebuilding programs in history. Total hurricane damages might top $200 billion.

Congressional officials have raised concerns about a deal to pay Carnival Cruise Lines up to $236 million for housing hurricane evacuees. Questions have been raised about no-bid contracts handed out to politically connected companies such as Halliburton.

In addition, like Iraq, much of the money to rebuild has been approved with no clear plans on how it will be spent.

"The early indicators are not good," said Beth Daley, a spokeswoman for the Project on Government Oversight. "It looks like [Federal Emergency Management Agency] is doing a very poor job of spending money wisely."

Several proposals are aimed at beefing up the role played by inspectors general, the officials assigned to federal agencies to crack down on waste, fraud and abuse. But legislative delays have led to fears there will not be enough oversight on the ground any time soon.

"Time is wasting on these things," said one U.S. official observing the process. "If we don't get down there soon, all the water will have drained out of New Orleans and so will all the money."

Hurricane legislation already passed has added $15 million to bolster the Inspector General's office within the Department of Homeland Security, which has coordinated much of the relief efforts to date.

Richard Skinner, the department's inspector general, told a congressional panel last week that he and his counterparts from several agencies were working together, having committed 300 auditors and investigators to the effort.

Skinner signaled that he wanted more money but was against creating another anti-fraud agency. A proposal by Rep. Kendrick Meek, D-Fla., would give Skinner an additional $15 million and 40 more employees.

"We need to call out some of these contractors that have been abusive," said Meek, the ranking minority member of the oversight subcommittee of the Homeland Security Committee. "People are very frustrated throughout the country by story after story of contractors taking advantage of the American taxpayer."

But other Republicans and Democrats have said they are opposed to expanding Skinner's bureaucratic empire for a temporary event like the hurricane. In addition, there is concern that Skinner will be unable to oversee effectively all of the agencies involved, which range from the U.S. Army Corps of Engineers to FEMA.

As a result, several have pushed for expanding the duties of the current special inspector general for Iraq, Stewart Bowen, who monitors reconstruction efforts in that country. That would allow for a quick startup and oversight across all the agencies, and would shut down after hurricane rebuilding is completed, proponents of the approach said.

Steven Schooner, a procurement expert at George Washington University's law school, said there was an urgent need for oversight. He said cutbacks in federal contract administrators have made it difficult for the government to supervise contractors' performance.

"Anything that the administration does that's proactive is a far better investment than doing post hoc [investigations]," Schooner said. "The U.S. government is woefully unprepared to engage in capital construction projects on this scale."